Baltimore is leading the charge against improper payments, asking the state to strip $1.3 million worth of tax credits from more than 2,000 homes.

The tax credits were supposed to go to those living in their homes, but these ”homes” might better be called empty rooms  rentals and boarded-up properties that have been saving their owners big-time.The Baltimore Sun featured another report this summer, finding that 465 properties that were receiving the tax break from the city had been deemed vacant, unsafe, or uninhabitable by that very same city? The jurisdiction is now ”taking an assertive approach on this,” as Henry Raymond, the deputy director of the finance department, stated. (Nice to see Baltimore getting aggressive with these tax abusers. Go get them!)

The majority of the improper payments may not have been fraud at all: the homestead program’s tax credit was previously automatically granted to buyers, leaving some homeowners today in the lurch. The article quotes one out-of-work homeowner who now owes $2,832 for this year and $3,540 for last. ”I’m going to lose it, simple fact,” the man said. (My question for that out-of-work homeowner is: How many years have you been cheating on the homestead tax? How many cops and firemen need to lose their jobs because you didn’t pay your fair share for years? Now you are unemployed and we should feel bad that you are going to lose the extra property that you have been scamming on?)

Homestead exemptions are usually straight forward: a) you must be alive, and b) it must be your primary residence. Often individuals not in compliance have inherited the property, or are renting out the property, or have just moved to another address but still receive the exemption.

Source: Today’s ”Fraud of the Day” is based on an article entitled, “Baltimore asks state to strip tax credits from 2,157 homes,” by Jamie Smith Hopkins, published by The Baltimore Sun, October 13, 2011.

Baltimore, MD  Baltimore officials are asking the state to strip more than $1.3 million in property-tax credits they say were improperly granted to 2,157 homes, an early example of what city officials vow will be a continuing battle against tax-credit scofflaws.

The city’s finance department also intends to collect up to seven years of back taxes, penalties and interest from the property owners unless they can prove they lived in the homes during those tax years. The city says those owners don’t occupy the homes, as the tax break requires. The properties are a mix of rental, empty and boarded-up homes.

Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.

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